E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
Google’s Shopping Campaigns, announced late last year, ultimately will let retailers more precisely target top-performing products and better optimize for online and local conversions, says Mercent CEO Eric Best. But there are near-term drawbacks.
In late 2013, Google announced Shopping Campaigns: a new campaign structure for product listing ads that offers a better way to manage the unique challenges of scaling Google PLA ads. With many retail-specific features, Shopping Campaigns presents a new phase in the development of Google’s feed-driven shopping ads.
For many advertisers, the new structure will present cleaner, more intuitive methods of building out campaigns across catalogs of all sizes. For experienced advertisers with sophisticated campaign structures already in place, some features may be limiting. If built correctly by the advertiser, Google Shopping Campaigns will afford more discoverable views of performance by individual products, brands and categories. The primary advantages and drawbacks of Shopping Campaigns, in its present state, are detailed below. Please note that Google is likely to make changes as they refine capabilities and user experience.
We predict that the new Google Shopping Campaigns paradigm will eventually supplant the current feed-centric methods of designating ad groups and product targets. Much like Enhanced Campaigns in mid-2013 replaced the previous AdWords campaign structure, we expect Google Shopping Campaigns to ultimately be the required mode of management for these retail-focused ads.
- Shopping Dimensions—With the new reporting structure, traffic metrics will be available for any segmentation of the product feed. Impressions, clicks and click-through rate (CTR) will be provided at the brand, category and product level—as well as for combinations of brands, categories and custom designations—rather than only for distinct Product Targets.
- More robust campaign structure management—New Product Groups replace Ad Groups and Product Targets, facilitating a streamlined “subdivided” product structure. Advertisers should be able to more easily and efficiently create a hierarchical campaign structure, with categories nested beneath brands or vice versa, and individual products or custom groupings serving as an additional layer of granularity. By creating a logical, visible, top-down campaign structure, users of shopping campaigns can better avoid cross-serving and bid overlap, two traditional pitfalls of Google PLA management.
- New Tools and Insights—In addition to new campaign structure and product target designation tools, Google will also be providing pieces of competitive landscape data within AdWords: benchmark Max CPC [cost per click], click-through rate, and impression share versus a peer set within your vertical. These new insights will allow advertisers to see how their bids, exposure and traffic volume stack up against competitors, and should be triangulated with revenue data to identify potential areas for efficient growth.
- New method of creating custom product segments—Whereas custom grouping and targeting has traditionally been accomplished via AdWords labels specified in the product data feed, Google Shopping Campaigns allows the advertiser to make groupings distinctly in AdWords and thereby avoid overlap and needless complexity. It will, however, limit the number of custom designations available. Advertisers will still be able to group products by feed elements beyond category, brand and SKU, such as: gender, color, size, mark-down or inventory status. With a limited number of designations, it is important to be mindful of what targeting parameters are important for a given campaign.
- Expanded controls for multi-channel ad serving—A new Shopping Channels setting allows campaign level control between Online and Local formats.
We anticipate these new features to provide retailers the ability to more precisely target top performing products and ultimately better optimize for online and local conversions. We expect these new controls to have a major impact on Google Shopping performance in holiday 2014.
While the emergence of Google Shopping Campaigns is an exciting development for advertisers, there are several near-term drawbacks
- Bid Modifiers can only be set at the campaign level—Whereas previously mobile, geolocation, and day-parting modifiers could be set at the ad group level, Google Shopping Campaigns only allows for making these adjustments at the campaign level. This will make it more difficult specifically tailor bid strategy to your target audience
- Negative Keywords can only be set at the campaign level—Similarly, negative keywords can only be added at the campaign level, giving advertisers less control over queries that deliver ads for specific products
- Navigating to specific bids will be time-consuming—To make a bid change, advertisers will have to drill down and locate the appropriate product grouping within their campaign hierarchy. This will be labor-intensive for large, hierarchical programs with several layers of granularity and many products.
In preparation for Shopping Campaigns retailers should focus on the following:
- Organize your existing legacy campaigns in a more semantic, top-down category structure. In order to successfully migrate legacy campaigns to the new Google Shopping Campaign paradigm, advertisers will need to ensure that existing campaigns are structured in a granular way, in parallel with the hierarchies that the new top-down structure will afford.
- Be aware of which campaigns and products targets are critical drivers of performance—This will help determine the new Campaign Priority settings and provide a path to migrating products over to Shopping Campaigns. To maintain overall performance, it might be best to start with a few low-impact campaigns at first; take a mid-range subset of products that are unlikely to have a large impact on overall performance.
- As of January 2014 Google has not released AdWords’ API capabilities for Shopping Campaigns – This means third-party platform management is not yet fully available. In the near-term, it will be more difficult and time-consuming to build out granular campaigns that fully express large product catalogs, and to manage a large volume of bids across product groupings.
About Mercent—Mercent Retail provides a data feed management solution to manage a variety of online channels. Mercent Retail for Product Listing Ads provides a single, streamlined interface for managing campaign feeds and performance optimization.